@PROFDOCDIGITALLIBRARIES
FPC Exam Fundamental Payroll Questions and
Answers 2025
1. 668-W : correct answer :Notice of Levy on Wages, Salary, and Other
Income
2. 1096 : correct answer :Annual Summary and Transmittal of U.S.
Information Returns
3. Under the FLSA how old must a minor be to be employed? : correct
answer :14
PR
4. What is the FUTA tax rate? : correct answer :6.0%
5. On form 941, the employer reports : correct answer :Social Security
Wages
O
6. What is the formula for calculating an employees net pay? : correct
answer :Gross pay-deductions for taxes- other deductions
7. Which plan discriminates in favor of highly compensated employees? :
FD
correct answer :Nonqualified deferred compensation plans
8. What is the federal minimum wage per hour on January 1, 2018? :
correct answer :$7.25
9. What law determines time limits with which employees must be
O
paid after wages are earned? : correct answer :State Laws
10. Cafeteria plans are authorized by what internal revenue code
C
section? : correct answer :125
11. The direct deposit data sent to the bank after payroll processing is an
example of : correct answer :Interface
12. What taxes, if any, must be withheld from payments to an
independent contractor who provided a tin? : correct answer :No
taxes are withheld
, @PROFDOCDIGITALLIBRARIES
13. An external audit: : correct answer :Allows an objective assessment
of the financial statements.
14.Employees' privacy rights are governed by all of the following except:
: correct answer :Local Legislation
15. Under the FLSA, what basis is used to determine whether a non-
exempt employee is to be paid overtime? : correct answer :Hours
worked in a work week
16.Overtime payments are included in the calculation of what tax, if any?
: correct answer :They are included in all tax calculations
17. What is the 2018 wage base for social security tax? : correct answer
PR
:$128,400.00
18.If an employee does not have federal tax withheld and has not
claimed exempt, what must the employer do? : correct answer
:Provide the employee with the EITC notice
O
19.A computerized payroll system can help a payroll dept.
accomplish all of the following tasks except: : correct answer
:Recognize changes in laws and regulations
FD
20. An employee's profit sharing bonus is payable in the year
following his death. How should the bonus be taxed and reported? :
correct answer :Withhold no taxes and report the bonus on for
1099- misc.
O
21. In what ways can a computerized system increase the accuracy
of employees paychecks? : correct answer :By reducing human
C
error
22. What federal taxes must an employer withhold from an
employees reported tips? : correct answer :Federal income, social
security and medicare tax
23. The main purpose of batch controls is to : correct answer
:Validate data entry accuracy
FPC Exam Fundamental Payroll Questions and
Answers 2025
1. 668-W : correct answer :Notice of Levy on Wages, Salary, and Other
Income
2. 1096 : correct answer :Annual Summary and Transmittal of U.S.
Information Returns
3. Under the FLSA how old must a minor be to be employed? : correct
answer :14
PR
4. What is the FUTA tax rate? : correct answer :6.0%
5. On form 941, the employer reports : correct answer :Social Security
Wages
O
6. What is the formula for calculating an employees net pay? : correct
answer :Gross pay-deductions for taxes- other deductions
7. Which plan discriminates in favor of highly compensated employees? :
FD
correct answer :Nonqualified deferred compensation plans
8. What is the federal minimum wage per hour on January 1, 2018? :
correct answer :$7.25
9. What law determines time limits with which employees must be
O
paid after wages are earned? : correct answer :State Laws
10. Cafeteria plans are authorized by what internal revenue code
C
section? : correct answer :125
11. The direct deposit data sent to the bank after payroll processing is an
example of : correct answer :Interface
12. What taxes, if any, must be withheld from payments to an
independent contractor who provided a tin? : correct answer :No
taxes are withheld
, @PROFDOCDIGITALLIBRARIES
13. An external audit: : correct answer :Allows an objective assessment
of the financial statements.
14.Employees' privacy rights are governed by all of the following except:
: correct answer :Local Legislation
15. Under the FLSA, what basis is used to determine whether a non-
exempt employee is to be paid overtime? : correct answer :Hours
worked in a work week
16.Overtime payments are included in the calculation of what tax, if any?
: correct answer :They are included in all tax calculations
17. What is the 2018 wage base for social security tax? : correct answer
PR
:$128,400.00
18.If an employee does not have federal tax withheld and has not
claimed exempt, what must the employer do? : correct answer
:Provide the employee with the EITC notice
O
19.A computerized payroll system can help a payroll dept.
accomplish all of the following tasks except: : correct answer
:Recognize changes in laws and regulations
FD
20. An employee's profit sharing bonus is payable in the year
following his death. How should the bonus be taxed and reported? :
correct answer :Withhold no taxes and report the bonus on for
1099- misc.
O
21. In what ways can a computerized system increase the accuracy
of employees paychecks? : correct answer :By reducing human
C
error
22. What federal taxes must an employer withhold from an
employees reported tips? : correct answer :Federal income, social
security and medicare tax
23. The main purpose of batch controls is to : correct answer
:Validate data entry accuracy
